Europe Gets Cold Feet on “TTIP,” Americans Should Too, But Obama Needs it for his Legacy

As almost always, the U.S. government and European Commission are on the same page, reading from the same script. This year they have one overriding goal in common: to create the world’s biggest “free” trade area by passing the Transatlantic Trade and Investment Partnership (TTIP) into national and supranational law on both sides of the Atlantic.

To this end the White House is furiously lobbying Congress to grant it fast track authority for the passage of not only TTIP, but also TPP (Trans-Pacific Partnership). It is to be Obama’s swansong legacy. And with the pro-“free” trade Republicans firmly back in control on the Hill, he’s almost certain to get what it wants.

As such, TPP and TTIP negotiations will likely remain closed off from the public until the deals are finalized, by which time it will already be too late: just as happened with the passage of NAFTA in 1994, a largely compliant Congress will sign along the dotted lines without questioning what they’re actually signing into existence.

While some members of Congress are quite happy to waive their rights to actively participate in the lawmaking process, others are wary of granting sole authority to documents that have yet to be seen. Here’s what independent senator Bernie Sanders had to say on the issue in a letter to U.S. Trade Representative Michael Froman:

It is incomprehensible to me that the leaders of major corporate interests who stand to gain enormous financial benefits from this agreement are actively involved in the writing of the TPP while, at the same time, the elected officials of this country, representing the American people, have little or no knowledge as to what is in it.

Unfortunately Sanders is one of a dying species of U.S. lawmakers who see their primary role as that of actually “making”, rather than rubber stamping, laws. As such, one can expect TPP and the TTIP to pass both houses with minimal trouble.

Big Trouble in Europe

However, before corporate lobbyists and free trade advocates break out the vintage Bollinger, they might want to pay attention to developments on the other side of the Atlantic, where increasing numbers of lawmakers are departing from the carefully prepared script.

As I warned in August, the signs are that some European governments are getting cold feet on the so-called “investment state dispute settlements” (ISDS) – the corporate sovereignty charters that give trade agreements like TTIP and TPP their long, sharp teeth, by allowing private companies to sue entire nations whenever they feel that a new law lost them money on their investment.

Most importantly, these renegade nations include Germany which, through its defacto control of the Eurozone’s purse strings, wields more influence over EU decision-making than any other Member State.

As I wrote at the time, it was too early to tell whether Germany’s reservations are genuine or whether they merely form part of last-minute horse-trading. Six months on, however, not only has Germany not changed its tune – the German Environment Minister, Barbara Hendricks, recently declared that she remains “skeptical about the Investor State Dispute Settlement mechanism,” which she believes is “simply not necessary” – it has formed an anti-ISDS alliance with the EU’s other political heavyweight, France.

Paris and Berlin want the Investor State Dispute Settlement mechanism (ISDS) removed from the transatlantic trade treaty currently being negotiated with Washington.

Matthias Fekl, the French Secretary of State for Foreign Trade, told EurActiv France that he would “never allow private tribunals in the pay of multinational companies to dictate the policies of sovereign states, particularly in certain domains like health and the environment”.

Criticism of TTIP, particularly from France, has crystallised around ISDS. The mechanism is designed to protect investments by allowing recourse to arbitration tribunals in the event of a conflict between a private company and a government.

Dramatic U-Turn

The importance of this latest development cannot be overstated. Less than a year ago, Francois Hollande’s government was insisting on speeding up TTIP negotiations. “As soon as principles have been set, as soon as mandates have been given, speed is not a problem, it’s of the essence,” Hollande told a joint news conference with President Barack Obama at the White House last February.

Now, eleven months on, France is applying the brakes. “France does not want the ISDS to be included in the negotiation mandate,” Matthias Fekl told the French Senate. “We have to preserve the right of the state to set and apply its own standards, to maintain the impartiality of the justice system and to allow the people of France, and the world, to assert their values,” he added.

Naturally, U.S. negotiators are frustrated at what they see as the “demonization” of the arbitration system – a system in which only investors can sue and only countries are sued, and where three ridiculously high-paid pro-business lawyers, often representing some of the world’s biggest corporate law firms, get to decide the outcome of billion-dollar legal cases brought by multinational firms against national governments. What could possibly go wrong?

One American negotiator said in Paris, “Investor State Dispute Settlements have never been, and will not be, a way for businesses to challenge legislation they do not agree with.”

Alas, as the recent experience of bilateral trade agreements have amply shown, the sole purpose of ISDS is to provide a watertight means for multinational corporations and billionaire investors to recoup millions or billions in lost profits resulting from the introduction of new national laws or regulations. By doing so, they make governments think long and hard before passing any new laws or regulation that might serve the public interest.

The German government is perfectly aware of this fact, having already been sued for over €3 billion by Swedish energy giant Vattenfall AG for daring to close a nuclear power plant owned by the Swedish company in the wake of the Fukishima disaster. As for France, it can draw on the bitter painful experience of the 2008 Adidas affair, when an arbitration tribunal awarded €403 million in damages to the financier Bernard Tapie. One of the judges, Pierre Estoup, has since been investigated for fraud and organised crime, while Christine Lagarde, who was Minister for the Economy during the trial, faces accusations of conflicts of interest in the case.

Not a single shot will be fired, yet almost all power will be seized and transferred into private hands — and all of it facilitated by our elected representatives who, by signing these treaties, will be permanently abdicating their responsibilities to represent and protect the interests of their voting constituencies.

Now, there is a glimmer of hope that things may not be quite so cut and dried. Opposition is slowly building among European governments that are suddenly fearful of the potential consequences of trading away what little sovereign power they haven’t already gifted to Brussels.

Public awareness and opposition to TTIP is blossoming in Europe. In December, thousands of protestors converged on Brussels’ business district to vent their anger against a potentially world-changing trade agreement being negotiated behind hermetically sealed doors by armies of corporate lawyers and lobbyists.

Even more telling was the scale of the public response to the European Commission’s recent TTIP consultation. More than 150,000 people responded to the survey, largely from the United Kingdom and Germany. Of them, 88% said they were opposed to the Investor State Dispute Settlement mechanism.

Naturally, the Commission has played down the results, stating that it will push the dossier to the very end of the TTIP negotiations, by which it probably means after the negotiations have been completed. After all, it’s one thing to be seen to consult the public; it’s quite another to actually listen to it. However, ignoring or sidelining the feelings or wishes of the national governments of Europe’s two largest economies is a much more difficult challenge. By Don Quijones

Globalization as a concept is dead in America. We are dealing with the aftermath of NAFTA which has devastated our country. TPP is dead, dead, dead. Keep an eye out for the 2016 elections no candidate who wants to win will touch this.

Julian the Apostate

Jan 21, 2015 at 7:32 pm

Sounds like a bad remake of Robocop 2. I’ve seen so much passed in the last few years, Petunia, that should have been political suicide and barely get a shrug. Alas, I am no longer sanguine that this can be stopped. Guess they’ll have to pass it to find out what’s in it…